Banks lift European shares after upbeat Citi results

* FTSEurofirst 300 index rises 0.3 percent

* Banks gain as Citigroup results top expectations

* Novo Nordisk hit by Pfizer insulin deal

By Harpreet Bhal

LONDON, Oct 18 (BestGrowthStock) – European shares rose to their
highest closing level in nearly six months on Monday, with banks
boosted by upbeat results from U.S. lender Citigroup (C.N: ),
while oil majors drew support from a rally in crude prices.

The pan-European FTSEurofirst 300 (.FTEU3: ) index of top
shares closed 0.3 percent higher at 1,088.40 points, its highest
closing level since April 26.

Banks were among the biggest gainers, buoyed by
better-than-forecast quarterly profit at Citigroup
[ID:nN18138072]. European banks Barclays (BARC.L: ), HSBC (HSBA.L: )
and Societe Generale (SOGN.PA: ) were up 1.1 to 2 percent.

“The (Citi) results have been a cause for cementing gains as
opposed to convincing people to take money off the table.
Indices are still firmly dictated by QE 2, the strength of the
dollar and strength of commodity prices,” said Joshua Raymond,
market strategist at City Index.

Heavyweight oil majors were also on the rise as crude prices
(CLc1: ) rose above $82 after the dollar pared earlier gains and
as week-old strikes at French refineries lifted refined product
futures [ID:nLDE69H0CV]. BP (BP.L: ), BG Group (BG.L: ) and Total
(TOTF.PA: ) added 0.9 to 2.3 percent.

Falls in mining stocks, however, limited further gains as
investors sold heavyweight miners following recent strength. The
STOXX Europe 600 basic resources index (.SXPP: ) shed 1.1 percent.

Within the sector, BHP Billiton (BLT.L: ) and Rio Tinto
(RIO.L: ) lost 0.6 percent and 1.5 percent respectively after the
companies ditched plans to form the world’s biggest iron-ore
joint venture. [ID:nSGE69G02M]

Across Europe, Britain’s FTSE 100 (.FTSE: ), Germany’s DAX
(.GDAXI: ) and France’s CAC 40 (.FCHI: ) were up 0.2 to 0.7 percent.

NOVO NORDISK PRESSURED

Among individual movers, insulin producer Novo Nordisk
(NOVOb.CO: ) fell 5.1 percent after U.S. peer Pfizer (PFE.N: )
agreed a deal to sell Indian group Biocon’s (BION.BO: ) biosimilar
versions of diabetes treatment insulin. [ID:nSGE69H0I8]

Philips Electronics (PHG.AS: ) shed 4.2 percent after the
world’s largest lighting group reported weaker-than-expected
revenue growth in the third quarter and gave a cautious
fourth-quarter outlook. [ID:nLDE69H087]

Luxury goods makers were also weak, with Hermes (HRMS.PA: )
and PPR (PRTP.PA: ) down 1.9 and 2.8 percent respectively.

Analysts said the sector was being pressured by a report by
U.S. consultancy Bain & Co which predicted the luxury sector’s
growth would slow to 3-5 percent next year after a 10 percent
rebound in 2010. [ID:nLDE69H10S]

On the upside, British chip designer ARM Holdings (ARM.L: )
rose 2.9 percent on the back of anticipation of strong earnings
from U.S. technology firms Apple (AAPL.O: ) and IBM Corp (IBM.N: ),
which report earnings after U.S. markets close on Monday.

On the economic front, data showed U.S. industrial
production contracted in September for the first time in more
than a year, strengthening the view that the U.S. Federal
Reserve will pump more money into the economy. [ID:nN18264813]

“Investors are sensitive to economic data considering most
people are pricing in extra stimulus from the Fed at the start
of November,” Raymond said.

Although further quantitative easing by the Fed has largely
been priced in to the equity market, investors are unsure of
just how much the U.S. central bank will inject through
purchases of government securities.
(Editing by David Cowell)

Banks lift European shares after upbeat Citi results